Rising Homeowners Rates and the Advantages of Using an Insurance Broker

Many of my clients are folks who contacted me originally for a quote because they, like so many, have been seeing insurance premium increases recently.

They ask why their home valuation is going up for insurance, while home market values have dropped.

There are a couple of reasons. 

First, your home is valued for insurance purposes based on what it would cost
to rebuild it, not on what you could sell it for.

Although home market values have dropped, the costs of building materials and labor are escalating, which causes home replacement values to rise.

In addition, recent “catastrophic events” such as Hurricane Sandy in 2012 and an earthquake followed by a hurricane in 2011, lead to extraordinary claims in terms of both quantity and severity. 

In the end, insurance carriers must stay in business by adjusting premiums.  So you will see homeowners premiums increase due to blanket carrier increases, plus adjustments to home replacement cost valuations.

One of many benefits of working with an insurance broker as opposed to a captive insurance company, whose agents only sell policies from one carrier, is that brokers have access to multiple carriers and can shop rates and coverages for you.  We don’t have to shoehorn customers into one type of policy.  Plus, after you become a client, we can shop your rates each year if you desire.

If your rates have gone up, or if you’re just not sure you’re getting the best rate or appropriate coverages, it’s a good idea to get a quote from a reputable broker.  If for no other purpose, we can review your coverages and recommend updated limits and endorsements which are appropriate to your current circumstances.

Ann Miller, sales representative, Redmer Insurance Group: Home office in Phoenix; main office in Nottingham, MD. Call 410-336-0760 or email ann@redmerinsurance.com